Sprint Plans Major Asset Write-Off

So much for goodwill: $31B in losses pegged to Nextel merger

By Laila Weir, Newser Staff

Posted Feb 1, 2008 12:27 PM CST

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Sprint Plans Major Asset Write-Off — Former Sprint Nextel Corp CEO Gary Forsee speaks at a news conference in New York in this Aug. 8, 2006 file photo. Forsee was ousted from the nation's third-largest wireless provider in October, 2007 following several quarters of falling subscriber numbers and other operational troubles. Sprint Nextel... (Associated Press)

Sprint Nextel says it may write off up to $31 billion related to the merger that created the combined company. The move comes just after a regime change at the company, which has struggled since the 2005 merger, and lost about 1 million customers last year. The write-off, accounting for most or all of the “goodwill” from the merger, will probably mean a big Q4 loss, reports the Washington Post.

“Taking the charge just reinforces” the perception that “the Nextel acquisition has been a disaster," said an analyst. Investors were unworried, however, and Sprint shares closed up 17 cents after the disclosure yesterday. Sprint said the write-off wouldn’t affect its cash balance or future cash flow, and that it would give the exact amount when it releases financial results Feb. 28. (More Sprint Nextel stories.)

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